Palm plans to get smaller in the coming weeks, as less money coming in the door means less money to spread around.

A company representative confirmed a report earlier Wednesday by PalmInfocenter that the struggling company has begun informing employees of job cuts, just as the holiday season kicks into full gear. The representative said Palm is not disclosing how many employees were affected by the decision to cut jobs, but PalmInfocenter said the number could be in the "hundreds." Palm had 1,247 employees as of May 31, according to its annual report.

Palm announced earlier this month that quarterly revenue and gross margin would be well below expectations after the company was unable to get a new product qualified for release, setting the stage for the layoffs. The company has struggled mightily this year as the Treo smartphone, so popular in years past, has fallen out of favor with consumers and businesses. The hardware look and feel of the Treo has grown stale against thinner models, and there still hasn't been a major update to the Palm OS since 2004, an eternity in this industry.

CEO Ed Colligan does not appear to be among those who will be laid off, at least yet. It's hard to see how fewer people will make it easier for Palm to create something new, but the company doesn't really have a choice if it wants to stay in business. It's really sad to see a company that has played such a pivotal role in the advancement of mobile computing on the brink like this.

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Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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